A Word on Pricing (and why I’m restructuring mine)

As a small business owner I am constantly struggling with my pricing.  When I first opened up shop I searched through Etsy and determined my pricing based on what others were doing. I raised my prices because I switched to a supplier who sells CPSIA-compliant tulle that is made in the USA because that is very important to me. Having tried out many different suppliers I noticed a huge difference in the quality of their tulle, and though they were priced higher it was worth it to me.

As my business grows my costs are getting higher.  While I do get help from my husband (thank goodness for him!) I am basically a one-woman operation.  I love what I do and am grateful to be doing it, but that doesn’t mean it isn’t still work!  It takes time to design tutus and dresses, order fabric and notions, cut fabric, sew, photograph products, edit the photographs, determine pricing, write up listings, figure out the logistics of shipping, order shipping supplies, packing and shipping, marketing (plus updating social media sites), keeping up with customer questions, making sure I am operating according to the law, figuring out taxes, paying bills, etc etc etc. I’m sure I forgot something in there. The point is it is a lot of hard work.

When I started my shop it was essentially a hobby.  Friends, family, and friends of friends would contact me and I’d make them tutus or outfits for a little over the cost of materials. With the economy being what it is I have had to take my shop more seriously so I can make a living off of it and contribute financially to my family. That is when I took the time (and money) to file my fictitious business name, obtain a California resellers permit, get my business license, make sure I have accounts set up for taxes, income, shop expenses etc.

As you can imagine, it was very disheartening when I recently crunched numbers and realized that at the end of the day I am actually losing money on this little venture of mine.  At first I thought I was making a small profit, but then I realized that I wasn’t taking into account any of my time or labor!  When my husband would suggest prices to me that included labor costs my stomach would turn and I would tell him that pricing my stuff that way would be pretty audacious.  I’ve come to realize that he’s been right all along. I think that many Etsians are hobbyists and don’t charge honestly or realistically for their handmade goods.  I know because I’ve been one of them.  I have always been afraid that if I charged what my products are really worth people would simply go elsewhere. During such tough economic times I can see why people would want to save buyers money, but short selling oneself only hurts small business and the general population of people who make handmade goods for a living.

I have been struggling with this decision and arguing with my husband over it and I have ultimately decided that, yes, this is my job and not just a hobby, and I need to charge accordingly. I tell you this, dear customer, because I don’t want you to be caught off guard when you see my prices increase across the board. When you buy from an artisan (as opposed to a large corporation) you are paying for their talent and expertise. You are paying for their time and all of the expenses that go into running their small businesses. In my case you are paying for higher quality materials made in the USA, you are paying for my 20+ years of sewing experience, and you are paying for the time it takes me to create something. As a work-at-home mom of two very young children my time is very valuable to me.

It always stings a little when people at the farmers’ market scoff at my pricing and say “Oh yeah, I can get one for my daughter at Costco for 10 bucks.” I am not Costco. I support an American company (and therefore American jobs and workers) by purchasing my quality American-made tulle from them, I support small business by having my sewing machines serviced locally, I do all the packaging, shipping, marketing, etc myself and I try to pay myself a fair hourly wage for the blood, sweat and sometimes tears that go into doing what I do. Costco can charge $10 a tutu because they source cheap polyester material from China and pay factory workers 20 cents a day to mass-produce thousands at a time. (That is an approximation, haha, but you see my point.) Their profit margin is enormous.

The Snow White tutu dress currently listed in my shop took me several DAYS (not hours) to complete. Why? It is an original design. I sketched it out myself and then drafted my own custom pattern, and when my first couple attempts didn’t work out as I had envisioned I had to go back to the drawing board. I bought fabric and sewing notions locally (at retail prices, ugh) and after many (MANY) hours of sewing I listed it on Etsy using a price I thought was fair (based on what other shops sold their dresses for.) It turns out that my dress at its original listing price only covered cost of materials plus an hour of labor at minimum wage. This doesn’t even include listing fees, PayPal fees, Etsy’s cut, etc. Ouch. So you see, my original pricing is not realistic at all and that is why I will slowly be raising my prices. To soften the blow, if you will, I will still offer occasional specials and coupon codes, but I really need to be honest with myself about what I am doing. While I do love what I do I have a family to think about and they must always come first.

This was a very long post so I sincerely thank you if you read all of it! I was inspired and empowered after reading a fellow seamstress’s blog about handmade goods and why they are “so expensive.” It was a great read and really helped to put things into perspective for me. I encourage everyone to read her brilliant blog post, whether you’re a seller or not. We as artists need to value ourselves and our time because our skills, our expertise, and our quality is worth it. Again, thanks for reading my blog!  I will (hopefully) be back soon with some exciting news. Until next time!

Crystal (Chloe’s mommy)

This is me sewing a version of my Mon Petit Chou-Chou tutu at 12:21 a.m. on July 21st, 2012 as a raffle item for the Canyon Lake Community Theater, photo courtesy of my husband Keith Silvas.

Advertisements

About chloemichellescloset

Crystal Silvas is a stay-at-home/work-at-home mom to two beautiful children in sunny San Diego, Ca. She is the owner and designer of Chloe Michelle's Closet, boutique style tutus and other frilly things. She loves the beach, singing, sewing, crafting and Disneyland trips with her family. She especially loves all things frilly and girly.
This entry was posted in Uncategorized and tagged , , , , , , . Bookmark the permalink.

2 Responses to A Word on Pricing (and why I’m restructuring mine)

  1. Just a thought says:

    I feel like part of the difficulties you’re facing is the fact that you make mostly/only tutus. It’s a very limited market, children’s clothing in itself is a small niche market, however to limit it to girls clothing (not trying to perpetuate gender stereotypes) and not only that, but just tutus, an item that is worn only really for fun or special occasions seems as though you’re anchoring yourself, not allowing your business a chance to thrive. I know I’m just a random Internet opinion, however I would suggest making the tutus a small part of your business, not the main focus. You want people to buy multiple items from you, if I were to buy my daughter a $40-$50 tutu it would be for her birthday, and I’d only buy the one. Perhaps look to make tutu party packs? Something like 5-10 tutus for a princess themed party, more importantly, expand your product base, make actual dresses little girls (or older kids/teens) can wear to school, or church. I’m sorry if this sounded harsh, I do not intend for it to, I can see you’re a very talented seemstres and have a very supportive and encouraging husband. I would love to see your business take off. Perhaps when my girls birthday comes around I’ll get her a tutu. 🙂

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s